Euro zone banking watchdog says not concerned over EU rules in Monte Paschi rescue
Reuters
Published Jan 11, 2017 05:29AM ET
Updated Jan 11, 2017 05:40AM ET
Euro zone banking watchdog says not concerned over EU rules in Monte Paschi rescue
BRUSSELS (Reuters) - The head of the euro zone banking watchdog said on Wednesday she had no concern about how EU bank failure rules had been applied in the public rescue of Italy's Banca Monte dei Paschi di Siena (MI:BMPS).
The Italian government and the EU supervisory authorities "are doing a good job" in the Monte Paschi case, Single Resolution Board chair Elke Koenig told a news conference.
The Italian government used a clause in EU rules on banking liquidation to reduce losses on Monte Paschi's creditors when it decided to rescue the ailing bank in December.
"I would not be concerned by that rule," Koenig said.
She added that the SRB, which is in charge of overseeing the orderly liquidation of failing banks, "is closely following all relevant developments in Italy and also in other member states".
The EU's bank liquidation rules have been operational since 2016 and are aimed at reducing taxpayers' costs in bank bailouts.
Under the rules, a bank's creditors are required to bear heavy losses, in a so-called 'bail-in', before the lender can be bailed out with public money. But an exception to the rules allows states to lower creditors' losses in extraordinary circumstances.
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Written By: Reuters
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